China’s spy threat to our solar energy grid

Australia’s fast-growing solar energy grid is being dominated by Chinese firms with links to the CCP, raising fears of the potential for Beijing to threaten solar energy supplies.

Home Affairs Minister Clare O'Neil. Picture: NCA NewsWire / Martin Ollman

Australia’s fast-growing solar energy grid is being dominated by Chinese firms with links to the Chinese Communist Party, raising fears of the potential for ­Beijing to sabotage, surveil or disrupt solar energy supplies.

The country’s solar grid is increasingly reliant on “smart inverters” to convert energy from rooftop solar panels into usable electricity for homes and businesses. But new research shows Chinese companies dominate 58 per cent of the Australian inverter market, making the devices, which are internet-connected and can be remotely controlled, potentially vulnerable to any Chinese attempt to target the solar electricity grid.

Under China’s national intelligence laws, the companies supplying these solar inverters could be ordered by Beijing to sabotage, surveil or disrupt power supplies to Australian homes, companies or government.

The two largest suppliers in the Australian solar inverter market, Sydney-based Sungrow and Melbourne-based GoodWe, are Chinese-owned and have links with the Chinese Communist Party.

Sungrow’s major shareholder, Professor Cao Renxian, is also president of the state-run China Voltaic Industry Association, which is required to “adhere to the (CCP) party’s line, principle and policies”.

Huawei, the Chinese firm blocked from participating in Australia’s 5G rollout in 2018 because of national security concerns, is also a supplier of solar inverters to Australia.

Although the federal government has stepped up efforts to protect Australia’s energy system from potential foreign interference, there are no secure measures currently in place to prevent malicious actors from using solar inverters to disrupt the solar electricity grid.

James Paterson, opposition home affairs and cyber security spokesman, who has commissioned research into the potential threat from Chinese solar inverters, said the government was rushing to secure renewable energy without taking measures to protect new energy sources from malicious actors.

“If companies like Huawei are not safe to be the backbone of our telecommunications network then they can hardly be safe as the backbone of our new electricity grid,” Senator Paterson told The Australian. “Yet that’s exactly what’s happening under the Albanese government’s rush to renewables with no cyber security mitigations.”

“We cannot afford for our electricity grid to be riddled with exploitable cyber security vulnerabilities in the most dangerous strategic environment since World War II. We know that critical infrastructure networks like power are of great interest to signals intelligence agencies in foreign authoritarian states, including China.”

Home Affairs Minister Clare O’Neil said the government was working to expand domestic manufacturing to reduce the reliance on “high-risk vendors” to provide vital solar technology.

“Our government is working across the economy to identify threats to our national security, which have been ignored for the last decade under a government which was asleep at the wheel on cyber security and the need to protect the infrastructure that Australians rely on every day,” a spokesman for Ms O’Neil said.

“Specifically in solar, we are examining ways to massively expand domestic manufacturing and end our reliance on importation of this vital technology, a common-sense policy change.”

The government has said that for Australia to reach its 43 per cent emissions reduction target there will need to be 22,000 500-watt solar panels installed each day and a total of 60 million by 2030.

China already dominates the global production of solar panels, with an 85 per cent market share – a fact that Prime Minister ­Anthony Albanese has previously described as a national ­security issue.

But it is the growing reliance on Chinese-produced solar smart inverters that turn direct current (DC) from solar panels into alternating current (AC) for homes and businesses that is causing most concern.

South Australia has mandated the use of smart inverters in all new solar systems, while Victoria will mandate their use from March next year as they gradually become the standard technology for new rooftop solar systems across the country.

Up to a million rooftop solar systems in Australia are expected to use smart inverters within three years. “In about two to three years, I think there will be a critical mass (of controllable smart inverters),” says Grace Young, chief innovation officer with clean tech device company Wattwatchers.

“I can see it becoming quite a serious threat in certain contexts and circumstances if it was done nefariously and, therefore, yes we absolutely have to take it seriously,” Ms Young said.

The Netherlands government last year launched an investigation into the potential to infiltrate solar systems via smart inverters after a hacker gained access to data and customers by controlling the remote inverters.

In the US, Republican Senator Marco Rubio has urged the banning of Huawei-made solar inverters from the US market on national security grounds.

Energy systems, and especially electricity grids, have increasingly been a target in global conflicts, with Russian-affiliated groups launching cyber attacks on energy utilities in Ukraine and in other NATO countries since Russia‘s invasion of Ukraine.

Earlier this year, the federal government began the process of removing numerous Chinese-made surveillance cameras from defence premises and other ­sensitive national security areas amid concerns that they could be exploited by Beijing for intelligence purposes.